There are a lot of things that skirt the line between revolution and over-promotion, and the cloud is surely one of them. The thing I believe distinguishes the categories is the presence or absence of a comprehensive cloud model. If you believe the cloud is an architecture for delivering applications/features from a large flexible resource pool to a ubiquitous and often mobile user community, it’s a revolution. If you believe the cloud replaces private IT, then it’s hype. We have a couple of indicators in the cloud space today that illustrate this.
Sprint and CDC are partnering to create a hosting/cloud experience based on CDC IT resources and Sprint’s network. The reason this is important is that it illustrates the fundamental coupling of cloud and network. You can’t have one without the other, and while we’ve looked at that as meaning that every cloud needs a network to cement it together, it’s also true that every network needs a cloud to make it profitable.
Here’s the thing. We don’t get online to push bits around, we get online to experience something. The bits are just troubling details along the delivery path. That’s hardly a model for profit growth, network-wise. The money in the long run will always be in the thing that the buyer is trying to pay for. Amazon is a retailer not a trucking company. Sprint, who is a mobile player, is telling us that you can’t make money on mobile networks. Since mobile networks offer the highest margin and ROI of any network, that means you can’t make money on networks. Enter the cloud.
The question is whether Sprint is doing smart cloud or dumb cloud. Their previous partnership with Cisco on collaboration suggests that they may be seeing cloud services as something offered over the Internet as an OTT play rather than something tied to their mobile services business. I think that’s a mistake. Service providers have high hopes for monetizing mobile customers through mobile/behavioral symbiosis at the service level, and a cloud is the logical platform for that. So Sprint should be looking there, a place where they can add to their mobile ARPU and not try to create a whole new following by creating a partnership. There’s not enough margin in retail cloud services for intermediaries.
Telefonica is also making a sort-of-cloud announcement, but while Sprint claims cloud positioning for what may not be a viable business model, Telefonica has a viable business model it’s not properly positioning in a cloud. The carrier has announced a mobile security service that’s designed to provide the mobile user with the same security they could expect from a well-protected desktop. Juniper’s Junos Pulse mobile client is the foundation for the service, and Juniper will play a role in management hosting.
This could have been a great cloud story. The Telefonica service, targeted at the enterprise to secure their public and private clouds, could be a winner. The Junos Pulse application could give Juniper a security reference in the cloud that would mean something, not just the usual PR babble. It’s not technology or potential that undershot here, it’s just positioning conservatism. Just like Sprint? Maybe.
The moral of all of this is that we’re still coming to terms with the cloud. On the one hand, everyone from users to vendors to carriers think that the cloud is the service model of the future. OK, then, what you do and sell for the future has to then have a cloud positioning associated with it.